First Home Buyer Guide Australia: Everything You Need to Know (2026)
The complete guide for Australian first home buyers. Covers the buying process step by step, First Home Owner Grants, stamp duty exemptions, deposit requirements, costs, and expert tips for every state.
Definition
The home buying journey at a glance
Buying your first home in Australia involves saving a deposit, securing finance, researching locations, finding a property, making an offer, exchanging contracts, and completing settlement. The process typically takes 3 to 12 months from the start of your search to moving in, depending on market conditions and your preparation.
Buying your first home is one of the most significant financial decisions you will make. The process can feel overwhelming — from understanding how much you can borrow to navigating contracts, stamp duty, and settlement. This guide breaks down the entire home buying process into clear, manageable steps, with specific information for Australian first home buyers.
The Complete First Home Buying Process
- 1
Assess your financial position
Before you start looking at properties, understand how much you can realistically afford. Calculate your income, expenses, existing debts, and savings. Most lenders require a deposit of at least 5-20% of the property price, plus funds for stamp duty, legal fees, and other costs. Use online borrowing calculators for an initial estimate.
- 2
Save your deposit
A 20% deposit avoids Lenders Mortgage Insurance (LMI), which can add thousands to your costs. However, many first home buyers purchase with a 5-10% deposit and pay LMI. Some government schemes (such as the Home Guarantee Scheme) allow purchases with as little as 5% deposit without LMI. Set up a dedicated savings account and consider a First Home Super Saver Scheme (FHSSS) withdrawal.
- 3
Get mortgage pre-approval
Apply to one or more lenders for pre-approval (also called conditional approval or approval in principle). Pre-approval tells you how much you can borrow and shows vendors you are a serious buyer. Pre-approval typically lasts 3 to 6 months and is not a guarantee of final approval.
- 4
Research locations and suburbs
Identify suburbs that fit your budget, lifestyle, and commute requirements. Research median prices, rental yields (if investing later), school catchments, public transport, local amenities, and planned infrastructure. Attend open homes in your target suburbs to understand what you can get for your budget.
- 5
Engage a conveyancer or solicitor
Appoint a licensed conveyancer or solicitor before you start making offers. They will review contracts, conduct searches, advise on special conditions, and handle the legal process through to settlement. Fees typically range from $800 to $2,500 depending on your state and the complexity of the transaction.
- 6
Find your property
Search online portals (Domain, realestate.com.au), attend open homes, and register with local agents in your target areas. When you find a property you like, research it thoroughly — check recent comparable sales, inspect multiple times at different times of day, and talk to neighbours if possible.
- 7
Conduct due diligence
Before making a formal offer, arrange a building and pest inspection ($400-$800), review the contract of sale with your conveyancer, and check zoning, planning overlays, and title encumbrances. For apartments, order a strata inspection report ($200-$400). See our complete due diligence checklist for all the checks you should make.
- 8
Make an offer or bid at auction
For private treaty sales, submit a written offer through the agent. Your offer can be conditional (subject to finance, building inspection, etc.) or unconditional. For auctions, complete all due diligence beforehand — there is no cooling-off period for auction purchases. Set a maximum price and do not exceed it under bidding pressure.
- 9
Exchange contracts
Once your offer is accepted (or you are the successful bidder at auction), both parties sign the contract and it becomes legally binding. The deposit (typically 5-10%) is paid at exchange. For private treaty sales in most states, you have a cooling-off period of 2-5 business days after exchange during which you can withdraw (with a small penalty).
- 10
Satisfy contract conditions
If your contract includes conditions (subject to finance, building inspection, etc.), work to satisfy them within the specified timeframes. Obtain formal loan approval from your lender, review the building inspection report, and instruct your conveyancer on any issues. If a condition cannot be met, your conveyancer will advise on your options.
- 11
Prepare for settlement
In the weeks before settlement, your lender and conveyancer will prepare the necessary documents. Arrange building insurance from the date of exchange (or settlement, depending on your state). Conduct a pre-settlement inspection 1-2 days before settlement to verify the property is in the expected condition.
- 12
Settle and get the keys
On settlement day, your lender transfers the balance of the purchase price to the vendor. Ownership is transferred, and you receive the keys. Settlement is typically handled electronically via PEXA. Your conveyancer will confirm when settlement is complete. Congratulations — you are now a homeowner.
First Home Owner Grants and Stamp Duty Concessions
Australian state and territory governments offer various incentives for first home buyers, including grants, stamp duty exemptions, and concessions. For a detailed breakdown of available exemptions, see our guide to stamp duty exemptions for first home buyers. Eligibility criteria and amounts change frequently, so check the current details with your state revenue office.
First Home Buyer Incentives by State (2026)
| State | First Home Owner Grant (FHOG) | Stamp Duty Concession | Key Conditions |
|---|---|---|---|
| NSW | $10,000 for new homes up to $600,000 | Full exemption for properties up to $800,000; concession up to $1,000,000 | Must be a new home or newly built; buyer must move in within 12 months and live there for 6 continuous months |
| VIC | $10,000 for new homes up to $750,000 (regional: $10,000 for new homes up to $750,000) | Full exemption for properties up to $600,000; concession for $600,001-$750,000 | Must be a new home; buyer must occupy as principal place of residence for 12 continuous months |
| QLD | $30,000 for new homes up to $750,000 | Concessions for homes under the transfer duty home concession threshold | Must be a new or substantially renovated home; buyer must move in within 1 year and live there for 6 continuous months |
| SA | $15,000 for new homes up to $650,000 | No stamp duty on properties up to $650,000 for eligible first home buyers (from mid-2023) | Must be a new home; buyer must occupy as principal place of residence for 6 continuous months |
| WA | $10,000 for new homes up to $750,000 (or $1,000,000 for homes north of 26th parallel) | Full exemption for properties up to $430,000; concession for $430,001-$530,000 | Must be a new home; buyer must occupy within 12 months and live there for 6 continuous months |
| TAS | $30,000 for new homes (commenced building or purchased from builder) | 50% duty concession for established homes up to $600,000 for eligible first home buyers | Must be a new home for FHOG; buyer must occupy within 12 months and live there for 6 continuous months |
| ACT | No FHOG (replaced by stamp duty concessions) | Full stamp duty exemption for properties up to $1,000,000 for eligible first home buyers | Must be the buyer's first property; must live in the property for at least 1 year |
| NT | $10,000 for new homes (no price cap); additional $2,000 BuildBonus available | Stamp duty concessions for first home buyers | Must be a new home; buyer must occupy as principal place of residence for 6 continuous months |
Important: Grant amounts and thresholds change regularly. The figures above are indicative as of early 2026. Always verify current eligibility and amounts with your state's revenue office or your conveyancer before relying on these figures in your budget.
Cost Breakdown: What You Actually Need to Pay
The purchase price is just the beginning. First home buyers are often surprised by the additional costs involved in buying property. Here is a realistic breakdown of what to budget for.
Upfront Costs
- Deposit: 5% to 20% of the purchase price. On a $700,000 property, that is $35,000 to $140,000.
- Stamp duty (transfer duty): Varies by state and property value. Can range from $0 (if eligible for first home buyer exemptions) to $30,000+ for higher-value properties. Use our stamp duty calculator to estimate your liability.
- Lenders Mortgage Insurance (LMI): Required if your deposit is less than 20%. Can cost $5,000 to $30,000+ depending on the loan amount and deposit size. LMI is a one-off payment that can usually be added to the loan. Learn more about understanding LMI and how to avoid it.
- Conveyancing / solicitor fees: $800 to $2,500 for managing the legal process.
- Building and pest inspection: $400 to $800.
- Strata inspection report (if applicable): $200 to $400.
- Loan application and establishment fees: $0 to $600 depending on the lender.
- Title search and registration fees: $100 to $400.
Ongoing Costs to Budget For
- Mortgage repayments: Your largest ongoing cost. Use our mortgage calculator to estimate repayments at the current interest rate plus a 2-3% buffer to ensure you can manage if rates rise.
- Council rates: Typically $1,000 to $3,000 per year depending on location and property value.
- Water rates: $800 to $1,500 per year.
- Building insurance: $1,000 to $3,000 per year depending on the property type, size, and location.
- Strata / body corporate levies (if applicable): $1,500 to $8,000+ per year for apartments and townhouses.
- Maintenance: Budget 1-2% of the property value per year for ongoing maintenance and repairs.
Rule of thumb: Budget for an additional 5-8% of the purchase price on top of your deposit for stamp duty, legal fees, inspections, and other upfront costs. On a $700,000 property, that means having $35,000 to $56,000 in addition to your deposit available at settlement. Some costs (like LMI) can be added to the loan, but doing so increases your total borrowing and repayments.
Top Tips for First Home Buyers
- Get pre-approval before you start looking. Use our borrowing capacity calculator to get an initial estimate. Knowing your budget prevents you from falling in love with a property you cannot afford and shows vendors you are a credible buyer.
- Do not stretch to your absolute maximum. Borrowing the maximum amount your lender will approve leaves no buffer for interest rate rises, job changes, or unexpected expenses. Borrow within your comfort zone, not the bank's comfort zone.
- Use government incentives. Check your eligibility for the First Home Owner Grant, stamp duty concessions, the Home Guarantee Scheme, and the First Home Super Saver Scheme. These can save you thousands to tens of thousands of dollars.
- Engage your conveyancer early. Do not wait until you find a property. Having a conveyancer on standby means they can review contracts quickly and you will not miss opportunities because of legal delays.
- Never skip the building inspection. A building and pest inspection is one of the best investments you can make. It costs $400 to $800 but can reveal defects worth tens of thousands of dollars to fix.
- Read the contract before you sign. Do not rely solely on your conveyancer. Read the contract yourself so you understand what you are committing to. Our guide to reading property contracts walks you through every section.
- Set a firm budget and stick to it. Auction fever and competitive bidding can push you well beyond your budget. Set your maximum price before the auction starts and walk away if bidding exceeds it. There will always be another property.
- Factor in all costs, not just the mortgage. Council rates, insurance, strata fees, and maintenance add thousands to your annual housing costs. Budget for these from day one.
Frequently Asked Questions
First Home Buyers: Understand Your Contract Before You Sign
Upload your property contract to Realestate Lens and get an instant AI analysis highlighting key terms, risks, and red flags — explained in plain English. Built specifically for Australian property contracts.
Analyse Your Contract FreeRelated Guides
- Stamp Duty Calculator — Calculate your stamp duty liability including first home buyer concessions.
- Property Due Diligence Checklist — The complete checklist for investigating a property before purchase.
- How to Read a Property Contract — Step-by-step guide to understanding every section of an Australian property contract.
- Property Contract Red Flags — Warning signs to watch for in any Australian property contract.